Assistant professor Global Entrepreneurship at Sprott School of Business. A high tech enthusiast: P. Eng., M.B.A. and later on a Ph.D. with a focus on innovation management. researcher, strategist, mentor, musician, antique car restaurateur, moto rider, and a happy family life.... life is never dull.....

Posts Tagged ‘gazelles’

Scott Shane is the 2009 Winner of the Global Award for Entrepreneurship Research. This essay (in Small Business Economics 2009, 33(2):141-149) is the Prize Lecture he gave upon receipt of the Award in May 2009 in Stockholm, Sweden. The essay draws on his book: Illusions of Entrepreneurship: The Costly Myths that Entrepreneurs, Investors and Policy Makers Live By. Yale University Press, 2008.

In this paper, Shane argues that policy makers should avoid subsidizing the typical start-ups and instead focus on high-growth firms. His rationale is that high-growth firms, sometimes called ‘gazelles’, are the source of economic vitality and job creation. Using various sources of data, he demonstrates that typical start-ups are headed by people not necessarily motivated by growth, in industries in which most start-ups fail, and not necessarily the best entrepreneurs, hence not generating innovation, jobs and wealth as policy makers would like to believe. He argues that this is not just a U.S. phenomenon since studies conducted elsewhere show similar results.

This is a rather strong argument given that most government officials do not want to ‘pick winners’ to support. Yet, Shane argues that start-ups with a high probability of generating jobs and enhancing economic growth can be identified.

In Canada, several, such as Wells and Hungerford (Policy Options, September 2011), are advocating that high-growth entrepreneurship is key to Canada’s future economic success.

Questions (to my entrepreneurship students but open to all to comment):

1) What are Shane’s key arguments against policies to support more people to become entrepreneurs?

2) What is your opinion of this paper: do you agree? disagree? why?

3) What is the situation in Canada? (Hint: google the Policy Options paper I mentioned above as one source of information)

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